THE improving trend in beef exports continued in July with the Department of Agriculture reporting 97,305 tonnes SW for the month to all destinations, up on the 94,000t recorded in June and up substantially on the 75,000t shipped in July last year.
A strong cattle supply pipeline should have kept the kill for the first weeks of July up around 123,000-124,000 head as seen in the last weeks of June, but rain intervened.
Interruption to the flow of cattle pulled the first two weeks of July back to 117,000 head. Without that disruption, production for the month would likely have pushed exports toward or just over 100,000t.
Interestingly March this year fell just short of 100,000t but off a smaller kill of 113,000-114,000 head per week. The difference was the proportion of females. In March it was 38-42 per cent whereas the last two weeks of July saw a female proportion in excess of 48pc.
But it may not be just the usual cattle supply and kill composition that will drive exports through the current month of August.
Last year, August produced a massive hike in exports from 75,000t in July to 92,000t with no accompanying increase in kill. For the whole of 2022, monthly beef exports did not reach 80,000t except for August.
Preceding the August 2022 surge, processors were describing the domestic market as clogged with beef due to consumers modifying their meat buying habits because of food inflation on top of the usual winter downturn in demand. Whole rumps were retailing at that time at less than $11 a kilogram.
Weakening of the Australian dollar against United States and Asian currencies and increased interest in grass-fed cuts and manufacturing beef (particularly from the US) appear to have provided the trigger to clean out the build-up of export-eligible product that was not able to be placed in the domestic market at an acceptable price. The extent of that redirection into export markets is illustrated by unconfirmed reports at the time of product going on the water unsold.
Fast forward 12 months and present-day factors seem strikingly similar to July/August 2022. The domestic market is still suffering from weak demand and is not expected to improve until the weather warms up, the Australian dollar is falling, and grass-fed cuts and manufacturing beef are meeting with increased interest.
Accordingly, it would not surprise if there were a similar surge in beef exports this August (but not necessarily the same magnitude as 2022) without seeing a commensurate hike in weekly kill rate.
Meanwhile the statistics on individual export destinations show where the recessionary trends are biting hardest and where some much hoped for upside might be found.
From a volume perspective the US is by far the best performing market at present.
Its surge to 23,910t in July reaffirmed its position as Australia's largest export market on a single month basis which it claimed back from China just last month.
However, on a cumulative basis for the first seven months, the US at 113,000t still trails Japan's 120,000t and China's 115,000t but has surged well past Korea's 104,000t to slot into third place.
The July result represents strong growth on June's 20,500t and a meteoric surge on monthly tonnages shipped throughout 2022 and 2021.
July 2020 was the last time tonnage of this magnitude was recorded and that was in the latter part of the 2019/2020 drought herd liquidation phase when females represented 56-57pc of the kill.
In contrast, female proportion since May this year has hovered in the 44-48pc range indicating a stabilisation in the herd after the La Nina rebuild years.
At present, Korea is the other of Australia's major markets to record good growth.
From 14,000t in June, Korea has jumped to its second biggest month for the year at 16,960t.
This confirms conversational advice from one major multi-site processor during the month of some very good sales volume into Korea but not unfortunately at great money. Still the sentiment was happy to be moving it.
In contrast to the uptick in US and Korean markets, China recorded a substantial drop in volume in July and Japan continued a downward trend which, on a year-to-year basis, has been evident since May.
China took 16,807t in July down from the solid 19,000-20,000t per month figures shipped in March, May and June. Nevertheless, every month this year has been well up on the previous year placing the cumulative year-to-date figure at plus 35pc.
Japan's 17,732t in July was modestly down on both previous month and previous year holding the cumulative result for the year so far at minus 5pc. While the downturn appears modest at this level it needs to be remembered that the first four months were positive with cumulative to April showing 6pc up on last year.
In the lesser volume markets, Indonesia continues to stand out with increased volume every month this year taking the year-to-year comparison to plus 75pc.
Such is the gain that the cumulative total for the seven months to date of 38,183t is almost equal to full year 2022.
Big hits to southern cattle prices
INCREASING concern about how dry it is becoming in the south is driving cattle out a bit earlier than usual and both feeder and meatworks classes have taken some big hits.
A week ago at Wagga, 10-20c/kg came off across the board and an excellent quality yarding of bullocks averaged little more than 500c/kg DW on the ground.
This week domestic feeder steers plummeted a further 50c/kg with the export types taking a further 28c hit bringing both classes well under 300c/kg average.
Bullock vendors stayed home this week, but the few decks offered regained none of the previous week's losses.
Cow numbers halved but that did not stem the tide with heavy score 3s dropping another 54c and score 4s a further 35c down.
In southern Qld, meatworks are now covered for August with YP ox quoted at 530c/kg and heavy cow at 450. Central and north Qld, 10c and 25c off those rates respectively.
